HP CEO Mark Hurd is big on cloud computing, but acknowledges its limits. For instance, HP "wouldn't put anything material in nature outside the firewall." The message: The cloud has its place, but there's a vast difference between private and public computing.

Credit: Larry Dignan

Hurd's talk, a Q&A with Gartner analysts David Cearley and Donna Scott at the IT Symposium, came amid a weak enterprise technology spending forecast for 2010, the integration of EDS and a scrum over the architecture of the next-generation data center. Hurd chose to stand during the interview and dabbled on a white board to make his points.

The HP chief covered a lot of ground, but his comments on cloud computing were the most interesting. Here's a guy who was speaking as a CEO running a massive company that happens to sell infrastructure that'll revolve around cloud computing.

Hurd said he was talking to CEOs about the cloud and representing the tech industry overall. He got jeers. Simply put, the term cloud computing isn't so clear. CEOs want it broken down into more tools, said Hurd. The disconnect occurs due to business users that don't quite follow cloud computing and vendors that view the technology as an attractive model.

The company plans to layer cloud services on its infrastructure in the future, but there will be a vast difference between private and public clouds.

"It's a very attractive model that can drive a lot of innovation into the market," said Hurd. But there are hurdles. CEOs do question the cloud sometimes and you can add Hurd to that club. For instance, if HP CIO Randy Mott had a big idea and wanted to put general ledger and accounting in the cloud Hurd said he "would send him back to work."

Hurd clarified that the difference is between internal and external cloud. "We have 1,000 hacks a day and I can't tell you why, but they keep showing up. We wouldn't put anything material in nature outside the firewall," said Hurd.

On other topics:

Catching IBM. Hurd said "he doesn't follow them that closely" in an obvious joke. Hurd said HP will compete on a combination of products and services. "You can't do any part of the stack as a hobby," said Hurd. The buzzwords: "Integrated capabilities." Hurd pointed out that if HP sold off its PC business---"not saying that we would"---you lose scale. "Even if you don't like the margins you better be prepared to go all in," said Hurd, in a not-so-veiled dig at IBM.

Credit: Stephen Shankland, CNet News

On Oracle-Sun. Hurd said he expects HP to be a great partner to HP no matter how the Sun deal works out.

HP's focus will be services on vertical industries and the processes aligned with IT, said Hurd. Oddly enough, Oracle and IBM both target vertical industries like financial services and telecommunications.

Hurd said the company is trying to improve its customer experience and make it easy to buy from HP.

Hurd said he wants HP's software business to be larger, but wasn't going to put a number on market share. He noted that HP's software business is the sixth largest in the world. Analytics and automation are central to the software business and the primary focus. "In that context, we clearly want to be number one," said Hurd. HP will focus above the database level on analytics and data modeling.

The role of the CEO is strategy, the operating model to execute that strategy and finding the people to deliver it. "You have to get those three core things right to make it work," said Hurd.

Hurd ducked the culture theme when it comes to HP. He noted that an old HP saying was that if it creates great products customers will find them. Hurd put an addendum to that saying highlighting his approach. "We also want to sell them too," said Hurd.

HP's vision beyond devices. At its core, HP is a $68 billion dollar supply chain. Networking, PCs, servers, storage are all part of the mix. "These markets have very different characteristics," said Hurd. "We see converged infrastructure." Hurd talked up software and services as layered capabilities on top of the core. "One of services biggest assets is the software business," said Hurd, who noted that the company's business is to be an infrastructure company.

On HP's brand messaging, Hurd said the company is moving up the brand ratings. Innovation and trust is at the core of the HP brand, said Hurd.
The game plan for HP is to continue to interrupt the status quo in the verticals where it plays. Hurd's big plan is to provide an integrated stack, a goal that's popular these days (IBM, Oracle and others for instance).

The company's IT spend. Hurd walked through HP in 2005 when the company had a bloated IT budget. Hurd said that the company had more IT people than sales people and too many data centers and applications. IT spend is now down 42 percent. "I hate to make this sound simple," said Hurd. "This caused us a lot of unpleasant conversations." Processes were revamped and "we met the apps in the middle."

The company has 2,000 apps today, down from about 7,000. Hurd said the goal is to get HP down to 1,000 apps to run the business.

Is it a disadvantage to focus on the IT customer instead of the business customer? Hurd said that the EDS deal changed that. Part of the value HP can provide is aligning business and IT so CEOs can carry out plans. "When CEOs say they have bad IT it's more likely that there's a bad CEO than the IT department," said Hurd.